Potential Partnership Meeting. How Should I Prepare?
I have made contact with the owner of a small civil engineering firm (that a friend works for) who is keen on using my software and guiding the development. I think that is is a great opportunity because there are a million little shops like his that all do the same repetitive things (a lot of it because of building codes) and are ripe for automation. Also, he has connections throughout the industry that could be very important to any marketing efforts we may have.
It was quite exciting that he pointed out that we have a real competitor that I was unaware of that is charging way more than we are, that they are only somewhat happy with (https://www.tekla.com/us/products/tekla-tedds). I think this could be a real ramping up point, but I have been pondering a few things that I don't quite have the answers to.
-
While I am reasonable certain that the designs this company does are very similar across the industry, how do I make sure that I know that I am making a generally useful product and not just a few specialized scripts that could only ever be useful for one company. Civil Engineering is not exactly my expertise.
-
I feel that the offer of free software development for industry guidance, and network access is a fair trade. But I wonder if I am giving too much. Would it be prudent to ask for a small retainer for the software development work I am doing? Or potentially, a large retainer in exchange for some small amount of equity in my company? That would be great because then I could quit my daytime.
-
Any advice on legal pit-falls I may encounter? I don't exactly have consult a lawyer money at this point, but I am sure that he does.
Hi Daniel,
I've taken the liberty to go on your profile to know more about what you are developing first. Great to know that you are working on Google Sheets add-on, as we are also running an add-on at Mailmeteor. I can also see that you want to retreat in the mountain in the near future when your indie projects will allow you to leave a full-time job, that's also our goal!
My pieces of advice must be taken under this account.
It seems the meeting is in between a customer research interview and a sales meeting. Let's go through your three points:
Here are some questions you can ask to get to know more about this industry: "Tell me about the last time you..." "Talk me through the last time you had this problem" "Is there a budget for it? What is it" "How/where did you search for a solution?" "Why didn't you buy the other solution?" "Who else should I talk to?" "How are you currently solving PROBLEM X?" "How much does this problem cost you?" ... etc
Try to identify the opportunity and how you can scale it first. If it can be interesting, build a MVP and share it to other people than just the person whom you have a meeting with (let's say customers of your competitor). Honestly, I don't think you have to spend too much time like offering free development just to get insider insights. If you create value for the person you will meet, you can be pretty sure he/she will be ready to pay. It will allow you to stick to a SAAS approach, rather than losing yourself into custom service.
On the legal aspect, equity sharing is way overkill, unless you plan to associate with the person you will meet because you feel you can really do something together. Also worrying about legal stuff at this stage is way too early. Ship first ;-)
Hi Jean,
I have never been to France but I know it has a reputation for great mountains, hopefully your venture is successful so you can achieve that dream. Thanks for the advice, I think I had this in mind as more of a customer discovery than sales call, but I think your advice makes this idea more concrete. Great advice for questions too. Also, I was thinking of offering the software for free as a part of the partnership, but maybe I will test the waters asking them to pay first before I sweeten the deal to that point. I really need a development partner like this though, so I will probably do what it takes to get them on board at this point.
Congrats on getting the meeting. Here are a few thoughts:
Make this part of the customer discovery process in this and subsequent meetings (literally ask "How much of X is unique to your firm vs. standard practice?"). I'm sure this firm will be happy to give you guidance. Beyond that, I wouldn't worry too much about universal applicability (see: http://paulgraham.com/ds.html).
Don't do it for free. Pick a flat-rate 50% to 80% below what the established player is charging for a comparable offering and focus on building something that improves on the firm's complaints. You mention the market fragmentation of similar shops you'd be able to sell to. In my experience, those sales cycles can be longer since older engineers can be averse to change -- so you'll want to price your product high enough to make the effort worth it.
I'm no lawyer, but here's a list of considerations plus templates that'll probably be better than nothing: https://seqlegal.com/free-legal-documents/saas-agreement
Thanks for the advice, I as I mentioned above, I think I will attempt to start it out with a sale, if nothing else to get more from them for offering the software for free (referrals or consulting perhaps). Thanks for the legal docs, I will have a look. It stresses me out that the biggest drain on my project budget so far has been legal document generators... :/
Makes sense — good luck!